Islam and Bitcoin Q and A
Alright, this week I thought it would be best to put together a Q and A (question and answer) video for everyone. I've been receiving emails from people asking a multitude of questions and I thought it best to share those answers with all of you. So this time around I'll be answering the following questions: is Bitcoin halal? Where can I purchase Bitcoin in Saudi Arabia? And, is mining Bitcoin halal?
You'll see the "comments" link right under the blog title.
Alright, this week I thought it would be best to put together a Q and A video (question and answer) for everyone. I've been receiving emails from people asking a multitude of questions and I thought it best to share those answers with all of you. So this time around I'll be answering the following questions: is Bitcoin halal? Where can I purchase Bitcoin in Saudi Arabia? And, is mining Bitcoin halal?
Please sit back and enjoy the video as I attempt to answer your questions as best as I can. Please feel free to send additional questions and so long as I can answer them, then inshallah (God willing) I will. I want to thank all of you for supporting this site. May Allah reward you all, Ameen.
Alright, so let’s just get right into it today. I’ve been getting questions from many of you out there hitting me up asking me certain questions and I thought to myself, instead of writing everyone back individually, I’ll go ahead and create a video and answer the questions here so you know, sometimes we find that one person, if one person has a question, there are many others out there who have the same questions. So let see if we can get in and then tackle those questions.
So, three questions that we are going to tackle today. Question number one, is Bitcoin halal? That’s got to be the most popular question like, “Come on brother, I just want to know is it halal or is it not halal? Is it halal or haram? What is it?” That’s question number one. Question number two, you know, where can I buy Bitcoin in KSA or the Kingdom of Saudi Arabia? That is a question that came up. And the third question is, is mining Bitcoin halal? Making income from mining Bitcoin, would this be considered halal?
So let’s go ahead and jump right into it. In case some of you don’t know, I had a wonderful interview with a young lady Suraya Zainudin, Suraya Zainudin. If you go to the Islam and Bitcoin website and check out podcast number three, I had a wonderful conversation with our sister over there in Malaysia and we talked a lot about you know the… if we can say legality of Bitcoin when it comes to Islam. She wrote like a really great article. She writes wonderful articles where she covers this as well, again, whether Bitcoin is halal or not.
If you go to the website there where I had the podcast with her and check out the show notes, you will see links that lead to some of the articles that she has written. Inshallah you find that to be very helpful. But you know, for purposes of this Q and A video, let me go ahead and just say I am not a scholar. I am a student of knowledge. But I’m going to go ahead and share with you what I have found so far in regards to whether Bitcoin is halal or haram.
Alright, know this, know this, from everything I’ve seen so far, everything I’ve seen so far, no one has said that it’s haram, no one. I haven’t found anyone that says it’s haram. I have run across an article from a brother, I believe is a scholar and you plea– you’re going to have to forgive me I do not remember this brother’s name. But he did mention that he considers Bitcoin makrooh. He considers Bitcoin makrooh. And for those of you who do not know what makrooh means, it simply means, disliked. And the reason he said that it’s disliked is because of the volatile price, the volatile nature of the price when it comes to Bitcoin. It goes up and down and such– it can do so in such, such dramatic sweeps that he felt that the risk, the risk is very high. And I would agree. The risk is high and this is not something to just sort of jump into without doing your homework, right?
I do suggest, right, I’m not a financial adviser. I’m not trying to pretend to even be one. But I do suggest that you do your homework if you’re looking to step into the Bitcoin arena and you’re thinking of purchasing some Bitcoin. I would suggest that, you know, if you’re going to go out there and buy some Bitcoin, start very, very small, maybe $3, $5, $10, $20 the most. I’m here in the United States so I’m going buy US currency. But just really, really buy in small portions. Play around with it and see how it feels to you. There is a learning curve to Bitcoin. This is not something that’s very easy for the everyday person to step into. It’s just not. It’s not there right now. But that’s my suggestions.
So, in regards to, is Bitcoin halal? As I’ve said, I haven’t found anyone that says it’s haram and I found one scholar who says it’s Makrooh. I’m still doing some research. I’m still putting some feelers out there to see if I can interview people who are in the world of Islamic finance who can, you know, give us some concrete answers. If you know of anyone that I should take a look at, please do go ahead and you know leave that information in the comments down below. I’ll be more than happy to see if we can get them on the Islam and Bitcoin Podcast.
Alright. So, let’s move right along to the next question. Question number two comes from a brother in the Kingdom of Saudi Arabia and wanted to know, you know, where can I buy or where can I purchase Bitcoin in Saudi Arabia? Well, there’s a website called Local Bitcoins. And even before I get into that, let me just say, regardless of whether you are in Malaysia, Saudi Arabia, the United Arab Emirates, Bangladesh, Canada, wherever you may be, make sure that you really do check out what the local laws are in regards to Bitcoin and digital currency as a whole before you step into getting involved in this new technology, right? You want to make sure that you cover your bases and that you don’t do anything that’s considered illegal by your country. So, I definitely suggest that again that you do your homework first before you, you know dip your feet into the water as we say here in the West when it comes to Bitcoin.
There is a learning curve to Bitcoin. This is not something that is very easy for the everyday person to step into.
So, there’s different ways to go about doing that. I recommend that you, you know visit the website and check it out. I’m looking at it right now- that you visit the website checking out, check it out, again, it’s LocalBitcoins.com, just put in Saudi Arabia and you’ll see that you do have the means to do that in KSA.
Another means that you have is that there’s a website called Coin ATM Radar. Again, it’s Coin ATM Radar. This is a really, really cool website that shows you different Bitcoin ATM locations around the world, right? So you go to this website, punch in your location, it’ll tell you if there are Bitcoin ATMs in your area that will sell you Bitcoin. And it just so happens that there happens to be a Bitcoin ATM in Saudi Arabia. And I was actually shocked when I saw this. It looks like it’s at a place called Jubail, I have no idea if this brother or the brother who asked is anywhere near this place. And forgive me from saying the name wrong, Jubail.
So if you go ahead and as you can see here, I’m looking that the website here, it gives you information on you know, who is the maker of the machine, Lamassu. It’s a Lamassu ATM. I think Lamassu and Genesis I think are two companies that manufacture Bitcoin ATMs. But the website would get into telling you what’s the location of the Bitcoin ATM, what type of you know what direction the ATM machine works, meaning can you just purchase Bitcoin or can you sell your Bitcoin and get cash. I mean it looks like this Bitcoin machine is a one way machine, meaning you put your money in and you get Bitcoin in return. It also tells you the fees. It gives you the phone number… does it here? Actually I don’t see the phone number of the location but I’m pretty sure you can find them and check it out. So, yes, so you can get a Bitcoin in Saudi Arabia. All right? So, that is super awesome.
All right. So moving along to question number three, Bitcoin mining. So a brother reached out to me and asked, hey, is it halal to earn money off of mining, right? And he mentions something here. Let me see if I can go and read over my notes really quickly. He mentioned something along the lines of, you know, saying, hey, if I’m mining Bitcoin is it like I’m just doing nothing and collecting money just by doing nothing?
As far as I know, again, I am a student of knowledge, I’m not a scholar. As far I know, in Islam, if you provide a service to someone so long as it’s a service that’s on the up and up, right? Now, we’re making the assumptions that everything is legal, everything is cool. But if you’re providing someone a service then you are allowed to charge for that service and then there’s nothing wrong with that, again, so long as what you’re doing is halal.
So Bitcoin mining, how that works is, you’re actually not doing– it’s not like you’re not doing nothing, you’re actually, there is work involved. So, in Bitcoin, you need a particular computer which uses a– you need a particular amount of hashing power. Now you may have a mining rig setup at home which means you invested in purchasing the rig, setting it all up, you’re paying your electricity to keep the computer up and running. If you’re a miner, that means you’re most like to be leaving the computer on, your mining rig I should say, you’re leaving your mining rig on 24/7 so that way you can you know process information, verify information in the block chain in return you are able to earn a reward for doing that.
So, you are providing a service if you are mining Bitcoin and hence you get a portion of, or you can get a portion of Bitcoin for your services. And also, when users of the network are using Bitcoin, you charge a fee for that service. Again, you are allowing the network to function. And as– and since you’re doing such a great thing for the Bitcoin community, you get compensated for it. So in Islam, this is allowed. It’s allowed in Islam. This is not something where that involves usury or anything like that. You’re simply getting paid for providing a service. Again, your mining rig is up and running. And you are even providing the electricity.
Now, what if you say, well brother, I’m not– I don’t actually have a mining rig, I’m actually you know, I invested in a mining pool and I signed up to a cloud mining, right? So I pooled in with everyone else and a company, it’s maintaining the mining rig for me. They are providing me electricity for the mining rig, I just put in some money to sort of help out with that. Well, same thing, you are an investor in that and you’re helping out, you put in your share, whatever that share is again using US currency maybe you put in $100, maybe you put in $20, maybe you put in $1000, I don’t know. But whatever your share is, you get a certain percentage back, right?
And it’s the same thing because you are helping. You are also paying to maintain that mining where you are paying for the electricity. You are paying to maintain the network and you get compensated back in some way, shape or form in the form of Bitcoin. So this is something that to my knowledge is allowed in Islam because again, you’re providing a service.
So, that’s the three questions that we have today. I’m hoping I was able to answer those questions thoroughly. I guess that I don’t; want to keep this video too long. If you like this video, please like and share it. Leave a comment down below. Also, please note that when it comes to me responding to comments, I normally respond to comments that are on the Islam and Bitcoin website, not so much on YouTube, right? Please check us out on my Facebook, share us on Facebook, Twitter or any website that you frequent. Always take a look at the Islam and Bitcoin page and if the mood hits you, I always say, hey, donate to the cause.
Alright, so that’s it for my three questions today. If you have any more questions, please go ahead and contact me on the Islam and Bitcoin website. We do have a page here, contact page, going ahead and bring that up right now and boom! There it is. So you see it here is the contact page, go ahead and drop me a message. I will do my best to you know include when I make the next Q and A video. Insha Allah, your question will be one of the questions that I answer, all right? So everybody take care and again, thank you.
Assalaamu Aleikum Warahmatullahi Wabaraktuh Ma’salama.